Business taxes may be inevitable, but they do not have to be painful! With some organization, strategic planning, and time management, taxes will cease to intimidate or overwhelm you. Let the accounting experts at Hayes and Associates give you some practical tips you can implement today to simplify your experience with business taxes.
1. Shift Your Mindset about Business Taxes
We all have been guilty of focusing on tax season, and in the weeks (or days) leading up to filing deadlines find ourselves consumed with getting our books and documentation in order for successful filing.
A Better Way: Build time into your schedule on a consistent basis to work on your tax documentation and paperwork gathering. After all, most businesses are paying taxes quarterly, and those deadlines can roll around so quickly that you can’t afford to neglect them. Choosing a specific day of the month, whether it be the first, the fifth, or your lucky number can help you build a tax preparation habit. It will also make a difference if you block out a segment of your time on your calendar, thereby making it an inviolable event.
2. Keep Great Records
Perhaps in the harried pace of the typical work week, you set mail, bills, receipts, and other important financial information aside for a time when you anticipate being able to focus on it better. That inbox keeps piling up, and you haven’t seen the bottom of it in years.
A Better Way: Train yourself to handle each of those pieces of paper as they come in. If you can’t stop what you’re doing with each mail delivery, set aside a few minutes each workday to go ahead and update your books with the day’s (or at most the week’s) financial documents. The easiest approach, like preparing for tax filings, is to designate a specific time to the task, whether it be the start of your workday, the last task to “clear your desk” before heading home, or some other consistent time.
3. Prepare the Books
While you may have chosen to take bank and credit card statements at face value from a keenly optimistic (or too busy to do otherwise) perspective, the professionals behind those institutions are human too, and that means there is room for error.
A Better Way: Check all credit card and bank statements and make sure that their records match your records. If there are any differences, investigate and follow up until you have them reconciled. Make sure, whether online or on paper, that you have the following information to help you as you prepare your books:
- Receipts
- Inventory records
- Bank statements
- Expense records sorted by category
- Income records
You may have found yourself giving customers the benefit of the doubt, trusting that they will pay when they are able, and offering them chance after chance to settle their accounts, leaving you with debt that hasn’t been rectified and books that cannot balance.
A Better Way: Set deadlines for payment and stick to them, following up with reminders and reasonable penalties for late payment. Anticipate this process to take a little time, so begin well in advance of book closing deadlines.
4. Digitize Your Records
File cabinets and file folders have served as office staples for years. They are functional and can be helpful. If you are diligent to put invoices, receipts, documentation, and other relevant papers away, sure they can be right where you need them for tax preparation.
A Better Way: Ditch the clutter and the rectangular eyesores taking up all the space in your office. Scan and digitize your records so that they fit neatly into virtual folders on your computer, where you can send, share, and access them wherever you are with a few clicks. Besides the convenience, you’ll be far less likely to misplace anything important.
5. Find Ways to Save
Thrift is admirable, and certainly can help your business become profitable, but to grow your business, you have to invest in equipment, marketing, and more. They may cost you initially, but the potential income they can help you generate will be well worth the cost.
A Better Way: With a vision and plan in mind, conduct your research and make strategic investments to grow your company. Be aware of all the expenses you can deduct from your taxes and take full advantage of these savings, which help you maximize the return on your investment.
- Marketing your business
- Education and training for employees
- Travel expenses, including mileage
- Insurance premiums
- Utilities
- Research studies to help you understand your local market and client base
- Rent or mortgage payments
- Office equipment
- Donations to charity
6. Call in the Professionals
You’ve organized, digitized, and prioritized efficient bookkeeping and tax preparation, but you can’t shake the uncomfortable feeling that you’re missing something or that all of this investment is taking too much of your time and mental capacity, leaving you unable to run your business well.
A Better Way: Business accounting is our specialty at Hayes and Associates. We work with new start-ups, long-term family establishments, and many more. We understand the technicalities of business taxes, the legal speech on the forms, and exactly how to help you prepare and file on time and with maximum savings. Additionally, we can help you streamline your business processes, manage your books, and cast vision for your company’s future growth. You specialize in running a business; we provide the support you need to succeed. Give us a call today and let business taxes be one thing you no longer must worry about.
